New Section 1. Sections 1 through
17, and amendments thereto,
shall be known and may be cited as the bingo act.

Sec. 2. K.S.A. 79-4701 is hereby
amended to read as follows: 79-
4701. As used in this act, each of the following words and
phrases shallhave the following meaning unless the context otherwise
requires:

(a) "Act" means the bingo
act.

(b) "Administrator" means the
administrator of charitable gamingdesignated by the secretary pursuant to section 15, and
amendmentsthereto.

(a)(c) "Bingo"
or "games of bingo" means the games of call bingo
and instant bingo.

(d) "Bingo card" or "card" means a
reusable card which is markedoff into 25 squares arranged in five horizontal rows of five
squares eachand five vertical rows of five squares each, with each square
being des-ignated by a number, letter or combination of numbers and
letters. Onlythe center square shall be designated with the word "free". No
two cardsin the same game shall be identical.

(e) "Bingo face" or "face" means a
piece of paper which is markedoff into 25 squares arranged in five horizontal rows of five
squares eachand five vertical rows of five squares each, with each square
being des-ignated by a number, letter or combination of numbers and
letters. Onlythe center square shall be designated with the word "free". No
two bingofaces in the same game shall be identical. Faces shall be
disposable andshall not be reused after the game in which a player has used
such face.

(b)(f) "Call
bingo" means a game in which: (1) Each participant
mustpayplayer pays a charge
and; (2) a prize or prizes are awarded to
the
winner or winners in which; (3) each
participantplayer receives one or
more cards or in which a card or cards are included in a
paper gameprogram booklet each of which is marked off into 25 squares
arranged infive horizontal rows of five squares each and five vertical
rows of fivesquares each, with each square being designated by number,
letter orcombination of numbers and letters, and only the center
square desig-nated with the word "free" with no two cards being
identical, with theplayers coveringor faces; and (4) each player
covers the squares on eachcard or face as the operator of such game announces a
number, letter or
combination of numbers and letters appearing on an object selected
by
chance, either manually or mechanically from a receptacle in which
have
been placed objects bearing numbers, letters or combinations of
numbers
and letters corresponding to the system used for designating the
squares,with. The winner of each game
beingis the player or players first
properly
covering properly a predetermined and announced pattern of
squares
upon the card or a card which is included in a paper game
programbookletface being used by such player or
players.

"Call bingo" shall include any regular,
special, mini and progressivegame of bingo.

"Call bingo" doesshall not include any game utilizing an electronic or
computerized card system.

(c)(j) "Instant
bingo" means a game: (1) In which each
participantmust payplayer pays a charge; (2) in which
a prize or prizes are awarded
to the winner or winners; (3) in which each
participantplayer receives
one or more disposable pull-tab or break-open tickets which accord
aparticipantplayer an opportunity to win
something of value by opening
or detaching the paper covering from the back of the ticket to
reveal a
set of numbers, letters, symbols or configurations, or any
combination
thereof; (4) which is conducted by a licensee under this act; (5)
the con-
duct of which must be in the presence of the
participantsplayers; and
(6) which does not utilize any dice, normal playing cards, instant
ticket
with a removable latex covering or slot machines. Winners of
instant bingoshall be determined either (1) by a combination of letters,
numbers orsymbols determined and posted prior to the sale of instant bingo
ticketsor (2) by matching a letter, number or symbol under a tab of an
instantbingo ticket with the winning letter, number or symbol in a
designatedcall game of bingo during the same session.

"Instant bingo" doesshall not include any game utilizing electronically
generated or computer-generated tickets.

(k) "Lessor" means the owner, coowner,
lessor or sublessor of prem-ises upon which a licensee is permitted to manage, operate or
conductgames of bingo, whether or not a written lease has been entered
into andsubmitted to the administrator as required in subsection (c) of
K.S.A. 79-4703, and amendments thereto, and includes all political
subdivisions andother public agencies.

(m) "Mini bingo" means a game of call
bingo in which the prizesawarded are not less than 50% of the gross receipts derived from
the saleof cards or faces for participation in the game, but not more
than $50.

(n) "Net proceeds" means the gross
receipts received by the licenseefrom charges imposed on players for participation in games of
bingo andany admission fees or charges less amounts actually paid as
prizes ingames of bingo and any tax payable by the licensee.

(e)(o) "Nonprofit religious organization" means any
organization,
church, body of communicants, or group, gathered in common
member-
ship for mutual support and edification in piety, worship, and
religious
observances, or a society of individuals united for religious
purposes at a
definite place and of which no part of the net earnings inures to
the
benefit of any private shareholder or individual member of such
organi-
zation, and which religious organization maintains an established
place of
worship within this state and has a regular schedule of services or
meet-
ings at least on a weekly basis and has been determined by the
secretaryof revenueadministrator to be organized
and created as a bona fide re-
ligious organization and which has been exempted from the payment
of
federal income taxes as provided by section 501(c)(3) or section
501(d)
of the federal internal revenue code of 19541986, as amended, or de-
termined to be organized and operated as a bona fide nonprofit
religious
organization by the secretary of revenueadministrator.

(f)(p) "Nonprofit charitable organization" means any
organization
which is organized and operated for:

(1) The relief of poverty, distress, or
other condition of public con-
cern within this state; or

(2) for financially supporting the
activities of a charitable organization
as defined in paragraph (1); or

(3) for conferring direct benefits on the
community at large; and of
which no part of the net earnings inures to the benefit of any
private
shareholder or individual member of such organization and has been
de-
termined by the secretary of revenueadministrator to be organized and
operated as a bona fide charitable organization and which has been
ex-
empted from the payment of federal income taxes as provided by
sections
501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6) and 501(c)(7) of the
federal in-
ternal revenue code of 19541986, as
amended, or determined to be
organized and operated as a bona fide nonprofit charitable
organization
by the secretary of revenueadministrator.

(g)(q) "Nonprofit fraternal organization" means any
organization
within this state which exists for the common benefit, brotherhood,
or
other interests of its members and is authorized by its written
constitu-
tion, charter, articles of incorporation or bylaws to engage in a
fraternal,
civic or service purpose within this state and has been determined
by thesecretary of revenueadministrator to be
organized and operated as a bona
fide fraternal organization and which has been exempted from the
pay-
ment of federal income taxes as provided by section 501(c)(8) or
section
501(c)(10) of the federal internal revenue code of
19541986, as amended,
or determined to be organized and operated as a bona fide
nonprofit
fraternal organization by the secretary of revenueadministrator.

(h)(r) "Nonprofit educational organization" means any
public or pri-
vate elementary or secondary school or institution of higher
education
which has been determined by the secretary of
revenueadministrator to
be organized and operated as a bona fide educational organization
and
which has been exempted from the payment of federal income taxes
as
provided by section 501(c)(3) of the federal internal revenue code
of 19541986, as amended, or determined to be organized and operated
as a bona
fide nonprofit educational organization by the secretary of
revenuead-ministrator.

(i)(s) "Nonprofit veterans' organization" means any
organization
within this state or any branch, lodge, or chapter of a national or
state
organization within this state, the membership of which consists
exclu-
sively of individuals who qualify for membership because they were
or
are members of the armed services or forces of the United States,
or an
auxiliary unit or society of such a nonprofit veterans'
organization the
membership of which consists exclusively of individuals who were or
are
members of the armed services or forces of the United States, or
are
cadets, or are spouses, widows or widowers of individuals who were
or
are members of the armed services or forces of the United States,
and of
which no part of the net earnings inures to the benefit of any
private
shareholder or individual member of such organization, and has
been
determined by the secretary of revenueadministrator to be organized
and operated as a bona fide veterans' organization and which has
been
exempted from the payment of federal income taxes as provided by
sec-
tion 501(c)(4) or 501(c)(19) of the federal internal revenue code
of 19541986, as amended, or determined to be organized and operated
as a bona
fide nonprofit veterans' organization by the secretary of
revenueadmin-istrator.

(j) "Lessor" means the owner,
coowner, lessor or sublessor of prem-ises upon which a licensee is permitted to manage, operate
or conductgames of bingo, whether or not a written lease has been
entered into andsubmitted to the secretary of revenue as required in
subsection (c) ofK.S.A. 79-4703, and amendments thereto, and includes all
political sub-divisions and other public agencies.

(k)(u) "Premises" means any room, hall, building,
enclosure or out-
door area used for the management, operation or conduct of a game
of
bingo by a licensee.

(v) "Progressive bingo" means a game
of call bingo in which eitherthe established prize amount or number of bingo balls or objects
called,or both, may be increased from one session to the next scheduled
sessionif no player completes the required pattern within the specified
numberof bingo balls or objects drawn. The player's opportunity to win
shallincrease as the prize amount increases.

(w) "Regular game of bingo" means any
game of bingo which is sub-ject to the 25 game limit, $50 prize limit and the $1 charge
limit imposedunder subsections (g), (h) and (j) of K.S.A. 79-4706, and
amendmentsthereto.

(x) "Secretary" means the secretary of
revenue or the secretary's des-ignee.

(y) "Session" means a day on which a
licensee conducts games ofbingo.

Sec. 3. K.S.A. 79-4703 is hereby
amended to read as follows: 79-
4703. (a) Any bona fide nonprofit religious, charitable, fraternal,
educa-
tional or veterans' organization desiring to manage, operate or
conduct
games of bingo within the state of Kansas may make application for
a
license therefor in the manner provided under this section.
Application
for licenses required under the provisions of this act shall be
made to thesecretary of revenueadministrator upon
forms prepared by the secretaryof revenue or the secretary's designee andprescribed by the administra-tor. The application shall contain:

(1) The name and address of the
organization;

(2) the particular place or location for
which a license is desired;

(3) a sworn statement verifying that such
organization is a bona fide
nonprofit religious, charitable, fraternal, educational or
veterans' organi-
zation authorized to operate within the state of Kansas signed by
the
presiding officer and secretary of the organization; and

(4) such other information as may be
required by the secretary ofrevenueadministrator.

(b) No bingo license shall be issued to
any bona fide nonprofit relig-
ious, charitable, fraternal, educational or veterans' organization
if any of
its officers, directors or officials or persons employed on the
premises:

(1) Has been convicted of, has pleaded
guilty to or pleaded nolo con-tendere to a violation of gambling laws of any state or the
gambling laws
of the United States, or shall have forfeited bond to appear in
court to
answer charges for any such violation, or has been convicted or
pleaded
guilty or pleaded nolo contendere to the violation of any
law of this or any
other state which is classed as a felony under the laws of such
state;

(2) at the time of application for
renewal of a bingo license issued
hereunder would not be eligible for such license upon a first
application.

(c) An application for a license required
under the provisions of this
act shall be accompanied by a fee of $25 and if such organization
is to
conduct bingo on any leased premises, the terms of the lease shall
be
reduced to writing and a copy of the lease shall be submitted to
thesecretary of revenue. The secretary of revenue shall have
the power andadministrator. The administrator shall have the power and
authority to
approve or disapprove any lease submitted. No lease, which has
been
approved by the secretary of revenueadministrator, shall be amended,
modified or renewed in any manner until such amendments,
modifica-
tions or renewals of such lease have been approved by and are on
file
with the secretary of revenue. No lease submitted to the
secretary ofrevenue shalladministrator. No lease submitted
to the administrator shall
be approved unless:

(1) The rental cost of the premises
itself is fair and reasonable and,in no event, shall. The rent charged for
any session of bingo shall not
exceed 50% of the net proceeds for the session after
payment of prizesand taxes or the fair and reasonable rental value
determined by the sec-retary of revenueadministrator, whichever
is less. The rental costs so
charged shall be substantiated to the secretary of
revenueadministrator
under rules and regulations adopted by the
secretarypursuant to thebingo act.

(2) Any costs additional to the costs
under paragraph (1) of this sub-
section (c) which are to be borne by the lessee shall reflect the
actual
costs incurred by the lessor and shall first
shall be substantiated to thesecretary of revenue.administrator under rules
and regulations adoptedpursuant to the bingo act.

(3) No costs shall be borne by the lessee
unless such costs are enu-
merated in the lease submitted to the secretary of
revenueadministrator.

(d) Each license issued shall
expire at midnight on June 30 following
its date of issuance. A licensee may hold only one license and that
license
is valid for only one location. However, any licensee may operate
or con-
duct games of bingo, not to exceed five days in any one year, at
locations
other than that specified in the license
and. If any licensee does operate
or conduct games of bingo under this provision at a location other
than
that specified in the license, such licensee shall submit a written
notifi-
cation to the secretary of revenueadministrator, at least three days prior
to operating or conducting bingo at the change ofsuch other location. No
organization shall be issued a license to operate or conduct games
of bingo
at any location outside the county within which such organization
is lo-
cated as reported in its application for licensure pursuant to
subsection
(a), nor shall any. No licensee
shall operate or conduct games of bingo at
any location outside the county within which such licensee is
located.
Licenses issued under the provisions of this act shall not be
transferred
or assignable. If any organization licensed to play bingo changes
any of
its officers, directors or officials during the term of its bingo
license, such
organization shall report the names and addresses of such
individuals to
the secretary of revenueadministrator
immediately with the sworn state-
ment of each such individual as required by this section on
forms fur-nishedprescribed by the secretary
of revenueadministrator. No organi-
zation which denies its membership to persons for the reason of
their
race, color or physical handicap, shall be granted or allowed to
retain a
license issued under the authority of this act. Except for
nonprofit adult
care homes licensed under the laws of the state of Kansas, no
license shall
be issued to any organization under the provisions of this act
which has
not been in existence continuously within the state of Kansas for a
period
of 18 months immediately preceding the date of making application
for
a license. The licensee shall display the license in a prominent
place in
the vicinity of the area where it is to conduct bingo.

(d)(e) No lessor
of premises used for the management, operation or
conduct of any games of bingo shall permit the management,
operation
or conduct of bingo games on such premises unless and
until such lessorhas made application for and has been issued a
registration certificate by
the secretary of revenueadministrator.
Application for registration shall
be accompanied by a fee in the amount of $100
and. Such application
shall be made upon forms prescribed by the
secretaryadministrator andshall be submitted to the administrator. The application
shall contain:

(1) The name or names of the lessor of
premises which will be used
for the management, operation or conduct of any games of bingo
includ-
ing, in the case of a corporation, partnership, association, trust
or other
entity, the names of all individuals having more than a 10%
ownership
interest, either directly or indirectly in such entity;

(2) the address of such premises;

(3) the name or names of any and all
organizations which will manage,
operate or conduct any games of bingo on such premises during the
pe-
riod for which the registration certificate is valid;

(4) such other information as may be
required by the secretaryad-ministrator.

(e)(f) Each
registration certificate, or renewal thereof, issued under
the provisions of subsection (d)(e) shall
expire at midnight on June 30
following its date of issuance. The certificate of registration
shall be valid
for only one premises and shall be prominently
displayed in a prominentplace in the registered premises.

(f) The secretary of revenue
shall not issue a(g) No registration
certificate shall be issued for any premises if any
individual who is con-
nected in any way, directly or indirectly, with the owner or lessor
of the
premises has, within five years prior to
registration, has been convicted
of or pleaded guilty or nolo contendere to any felony or
illegal gambling
activity or purchased a tax stamp for wagering or gambling
activity.

Sec. 4. K.S.A. 79-4704 is hereby
amended to read as follows: 79-
4704. For the purpose of providing revenue which may be used by
the
state, counties and cities and for the privilege
of operating or conducting
games of bingo under the authority of this act:

(a) There is hereby levied and there
shall be collected and paid by
each licensee a tax at the rate of 3% upon the gross receipts
received by
the licensee from charges for participation in call bingo games
using bingocards and any admission fees or charges in
connection therewith. The tax
imposed by this section shall be in addition to the license fee
imposed
under K.S.A. 79-4703, and amendments thereto.

(b) There is hereby levied and there
shall be collected and paid byeach distributor a tax at a rate of $0.002 upon each bingo face
sold ordistributed by the distributor to each licensee conducting call
bingo gameswithin the state of Kansas. The distributor shall include the
tax due underthis subsection in the sales price of each bingo face paid by
the licenseeand such tax shall be itemized separately on the invoice
provided to thelicensee.

(b)(c) There is
hereby levied and there shall be collected and paid
by each bingo card distributor a tax at a rate of
1% upon the total of the
printed retail sales price of all tickets in each box of instant
bingo tickets
sold or distributed by the distributor to each licensee
conducting instant
bingo games within the state of Kansas. The bingo
card distributor shall
include the tax due under this subsection in the sales price of
each box
paid by the licensee and such tax shall be itemized separately on
the
invoice provided to the licensee.

(c)(d) Whenever,
in the judgment of the secretary of revenuead-ministrator, it is necessary, in order to secure the
collection of the tax
due under subsection (b), the secretaryadministrator shall require anybingo card distributor subject to such tax to file
a bond with the directorof taxation under conditions established by and in
such form and amount
as prescribed by rules and regulations adopted by the
secretary.

Sec. 5. K.S.A. 79-4705 is hereby
amended to read as follows: 79-
4705. (a) On dates prescribed by the director of
taxationadministrator,
every licensee operating or conducting a game of
bingooperator shall
make a return to the director of taxationadministrator upon forms pre-
scribed by the director statingadministrator.
Such form shall contain:

(1) The name and address of the
organization,licensee;

(2) the amount of the gross
receipts received from charges for ad-mission or participation in such
gamegames using bingo cards during the
preceding reporting period,;

(3) the number of bingo faces and the
name of the distributor fromwhom such faces were purchased or otherwise obtained during the
pre-ceding reporting period;

(4) the amount of the gross receipts
received from charges for admis-sion to the premises for participation in games of bingo during
the pre-ceding reporting period;

(5) the number of each
denomination of instant bingo tickets sold
during the preceding reporting period and;
and

(6) such other information as the
directoradministrator may deem
necessary. The licensee making the return
shall,

(b) At the time of making such
return, paylicensees conducting callbingo games using bingo cards shall remit to the
director of taxationad-ministrator the amount of the tax then due under
subsection (a) of K.S.A.
79-4704, and amendments thereto. The
directoradministrator may ex-
tend the time for making returns andthe
payment of such taxes for a
period not exceeding 60 days under rules and regulations
adopted by thesecretary of revenue.adopted pursuant to the
bingo act.

(b)(c) On dates
prescribed by the director of taxationadministrator,
every bingo card distributor shall make a return
to the director of taxationadministrator upon forms prescribed by the director,
listingadministra-tor. Such form shall state:

(1) the number of instant bingo
tickets sold or distributed to each
licensee,;

(2) the amount of the retail sales
price of such tickets,;

(3) the number of bingo cards sold or
distributed to each licensee;

(4) the number of
disposable paper call bingo faces sold or
distributed
to each licensee; and

(5) and such other information as
the directoradministrator may
deem necessary. The distributor making the return shall,
pay At the time
of making such return, the distributor shall remit to the
director of tax-ation theadministrator an amount equal
to 98% of the tax then due onthe instant bingo tickets under K.S.A. 79-4704due under subsection (b)of K.S.A. 79-4704, and amendments thereto.

(c)(d) If any
licensee or bingo cardlicensee or
distributor fails to
make a return, or to payor remit any tax,
when required to do so by the
provisions of this act, except in the case of an extension of time
granted
by the director of taxationadministrator,
there shall be added to the tax
determined to be due a penalty of 25% of the amount of such tax,
together
with interest at the rate per month prescribed by subsection (a) of
K.S.A.
79-2968, and amendments thereto, from the date the
tax was due until
paid.

(d)(e) If any
tax determined and assessed by the director of
taxationis unpaidadministrator is not remitted due
to fraud with intent to evade
the tax imposed by this act, there shall be added thereto a penalty
of fiftypercent50% of the amount of such tax,
together with interest at the rate
per month prescribed by subsection (a) of K.S.A. 79-2968,
and amend-
ments thereto, from the date the tax was due until paid.

(e)(f) Whenever,
in the judgment of the director of taxationadmin-istrator, the failure of any licensee or bingo
cardlicensee or distributor
to comply with the provisions of subsection (a) or
(b), (b) or (c) was due
to reasonable cause, the director of taxation may, in the
director's discre-tion,the administrator, in the administrator's
discretion, may waive or
reduce any of the penalties or interest imposed by this section,
upon
making a record of the reason therefor.

(f)(g) The
penalties imposed under this section shall be in addition
to , and in no way shall abridge, supersede, or
contravene,all other pen-
alties imposed by this act for violation of the provisions
of this actlaw.

Sec. 6. K.S.A. 79-4705a is hereby
amended to read as follows: 79-
4705a. (a) For the purpose of ascertaining the correctness of any
return
or for the purpose of determining the receipts and payments
of any li-censeeremittances of any licensee or
distributor, the secretary of revenueshall have power to examine, or cause to be examined by any
agent orrepresentative designated by the secretary for that
purpose,administratormay examine any books, papers, records or memoranda, bearing
upon
the matters required to be included in the records of the licensee
ordistributor, and. The administrator
may require the attendance of the
licensee or distributor in the county where the licensee
or distributor
resides, or where the location orof the
registered premises for bingo
games are located, or of any person having knowledge relating to
such
records, and may take testimony and require proof of such person
or
persons.

(b) The secretary of
revenueadministrator may issue subpoenas to
compel access to or for the production of such books, papers,
records or
memoranda in the custody of or to which the licensee or
distributor has
access, or to compel the appearance of such persons,
and. The adminis-trator may issue interrogatories to any such person to the
same extent
and subject to the same limitations as would apply if the subpoena
or
interrogatories were issued or served in aid of a civil action in
the district
court. The secretary or an agent or representative
designated by the sec-retary for that purposeadministrator may
administer oaths and take dep-
ositions to the same extent and subject to the same limitations as
would
apply if the deposition was in aid of a civil action in the
district court. In
case of the refusal of any person to comply with any subpoena or
inter-
rogatory or to testify to any matter regarding which such person
lawfully
may be lawfully questioned, the district court of
any county may, upon
application of the secretaryadministrator,
may order such person to com-
ply with such subpoena or interrogatory or to testify. Failure to
obey the
court's order may be punished by the court as contempt. Subpoenas
or
interrogatories issued under the provisions of this section may be
served
upon individuals and corporations in the manner provided in K.S.A.
60-
304, and amendments thereto, for the service of
process by any officer
authorized to serve subpoenas in civil actions or by the
secretary of rev-enue or an agent or representative designated by the
secretaryadminis-trator.

Sec. 7. K.S.A. 79-4706 is hereby
amended to read as follows: 79-
4706. Games of bingo managed, operated or conducted by
organizationslicensed under the provisions of this act shall be
managed, operated orconducted subject to rules and regulations adopted by the
secretary ofrevenueand conducted in accordance with the
bingo act and rules andregulations adopted pursuant thereto and the following
restrictions:

(a) The entire gross receipts received by
any such organizationli-censee from the operation or conduct of games of bingo,
except that
portion utilized for the payment of the cost of prizes and license
fees and
taxes on games of bingo cards imposed under
the provisions of this act,
shall be used exclusively for the lawful purposes of the
organizationli-censee permitted to conduct that game.

(b) No person exceptGames of bingo managed, conducted or oper-ated by a licensee, shall be managed, conducted or operated only
by a
bona fide member or spouse of a bona fide member of the
sponsoringorganizationlicensee or parent
organization or an auxiliary unit or society
of such sponsoring organization may participate in the
management, con-duct or operation of any game of bingolicensee.

(c) No lessor, any
employee of any such lessor or
any employee, of-
ficer or shareholder of a for profit corporation which is the
lessor, shall
play any game of bingo or participate in any drawing on
premises leased
by any such lessor or shallnor shall such
person be responsible for or
assist in the management, operation or conduct of any game of bingo
ordrawing on such premises.

(d) No person may participate in the
management, conduct or op-
eration of bingo games by a licensee if such person, within
five years prior
to such participation, has been convicted of or pleaded guilty or
nolocontendere to any felony or illegal gambling activity or
purchased a tax
stamp for wagering or gambling activity.

(e) No person may receive any
remuneration or profit for participat-ing in the management, conduct or operation of any game of
bingo.

(e) No person may receive any
remuneration or profit for participat-ing in the management, conduct or operation of any game of bingo
man-aged, conducted or operated by a licensee.

(f) The aggregate value of all prizes
including the retail value of all
merchandise awarded or offered by any such organization on
any singledaya licensee in a single session to
winners of games of regular and special
call bingo shall not exceed $1,200, and. The
value of a prize awarded ina progressive or mini bingo game shall not be included when
determiningthe limit imposed by this subsection. Any monetary
prize awarded in cashof $100of $500 or more awarded in games
of bingo shall be paid by a
check drawn on the bingo trust bank account of the licensee. Any
mon-etary prize awarded in games of bingo shall be paid by a check
on thebingo trust bank account of the licensee upon the request of the
winnerof such award.

(g) The total number of regular,
special and progressive call bingo
games managed, operated or conducted by any licensee in any
one daysession shall not exceed 25 and not more than five of such
games shall bejackpot or special games
and. Not more than one licensee may
conduct
bingo games at a given location or registered premises in any one
calendardaysession.

(h) The prize awarded by a
licensee in any one regular call bingo game
shall not exceed $50 in cash or its equivalent and
such. The prize in any
one jackpot or special call bingo game shall not
exceed $500 in cash orits equivalent.

(i) The retail value of any merchandise
received by a winner of a
bingo game shall be considered as the cash value for the purposes
of
determining the value of the prize.

(j) The charge made by a licensee
for a single reusablebingo card or
equivalent number of disposable paper cardsbingo faces to play in callregular bingo games in any one sessionother
than jackpot or specialgames shall not exceed $1
and. Such reusablebingo card or equivalent
number of disposable paper cardsbingo
faces shall be valid for all such
regular call bingo games conducted or operated by
the licensee on aparticular dayin any one session. The
charge made by a licensee for a
single reusablebingo card or
disposable paper cardbingo face to play
in
any single jackpot or, mini or progressive
special game shall not exceed
$1. Paper game program booklets with multiple bingo cards
printed onthe pages thereof are permitted so long as the charge made
for a regulargame program booklet does not exceed $1, except that the
charge forsuch game program booklet may be increased by an amount not
exceed-ing $1 for each single jackpot or special game in the game
program book-let. The charge made by a licensee for a
single instant bingo ticket shall
not exceed $1.

(k) Games of bingo shall not be managed,
operated or conducted by
any licensee on more than two calendar days in any one week.

(l) All licenses issued under the
provisions of this act shall be issued
in the name of the organization licensed.

(m) Each licensee shall keep a record of
all bingo games of bingo
managed, operated or conducted by it for a period of three years
following
the date the game is managed, operated or conducted.

(n) No person under the age of 18 years
shall participate in the man-
agement, operation or conduct of any game of bingo managed,
operated
or conducted by a licensee under the provisions of this act
and no licensee
shall sell any instant bingo ticket to a person under the age of 18
years.

(o) A lessor of premises used for the
management, operation or con-
duct of games of bingo or a licensee may not advertise
games of bingogames except to the extent and in the manner
prescribed by the rules
and regulations adopted by the secretary of revenue,
andpursuant to thebingo act. Any advertisement of any bingo
game of bingo by or on behalf
of such lessor or licensee shall specify the organization which is
managing,
operating or conducting the bingosuch
game. For the purposes of thisact and rules and regulations of the secretary of
revenue,The announce-
ment of the cancellation of a game of bingo shall not be considered
to be
an advertisement.

(p) No lessor of premises used
for the management, operation orconduct of any games of bingo or any licensee shall offer
an opportunityto participate in a game of chance, drawing, contest, door
prize, game,test of skill, lottery or any similar activity as an
inducement to participatein games of bingo nor as a bingo prize or preliminary to
the awarding ofa bingo prize.

(p) (1) Except as provided by
paragraph (2) of this subsection, nogame of chance or contest where a prize is awarded, other than
games ofbingo, shall be conducted on any premises where licensees are
conductinggames of bingo, where the intent of such game of chance or
contest is toinduce participation in such games of bingo.

(2) One drawing during a session may
be conducted by the licenseeor the lessor of the premises. Only a nonmonetary prize having a
valuenot exceeding $25 shall be awarded to the winner of such
drawing. Thereshall be no charge for participation in such drawing. There
shall be norequirement to purchase anything of value in order to
participate in suchdrawing. No more than four of such drawings shall be conducted
by eachlicensee or lessor during any calendar year.

(q) No licensee shall manage, operate or
conduct bingo on any leased
premises or with leased equipment unless all of the terms and
conditions
of rental or use, including the rental of chairs, bingo equipment,
tables,
security guards, janitor service or any other services, are set
forth in a
lease submitted, approved and on file with the secretary of
revenuead-ministrator.

(r) No premises shall be used for the
management, operation or con-
duct of bingo games of bingo by licensees
on more than three calendar
days in any one week.

(s) No premises shall be subdivided to
provide multiple premises
where games of bingo are managed, operated or conducted by
licensees,
whether or not the multiple premises have different addresses.

(t) No game of bingo shall be managed,
operated or conducted bylicensees on leased premises if at any time during the
immediately pre-
ceding 44 hours the premises, or any leased premises within 1,000
feet
of them, have been used for the management, operation or conduct of
a
game of bingo.

(u) Every licensee who has gross receipts
of $1,000 or more received
from participation in games, admission fees or charges and from any
other
source directly related to the operation or conduct of any
bingo games ofbingo in any calendar month shall maintain a bingo trust
bank account
into which all such receipts are deposited daily and from which all
pay-
ments are made relating to the management, operation or conduct of
anybingo games of bingo, except payment of
prizes of less than $100$200.
Having once established such bingo trust bank account, the licensee
shall
continue to make deposits of all receipts therein. Every licensee
shall
notify the secretary of revenueadministrator of the name of the bank in
which the bingo trust bank account is maintained, together with the
num-
ber and name of the account. Every licensee who maintains a bingo
trust
bank account shall maintain a complete record of all deposits and
with-
drawals from such bank account and the same shall be available to
thesecretary of revenue or the secretary's agents or
investigatorsadministra-tor to audit at any reasonable time.

(v) The records required
under this subsection (u) are in addition
to
all other records required to be kept by the licensee by
statute or rulesand regulations. The records required by
this subsection (u) shall be
maintained in the same place as all other records required to be
kept by
the licensee.

(w)(v) No
instant bingo ticket shall be sold by a licensee more than
one hour prior to the start of the first regular or special
game of call bingofor the dayof a session or after the
termination of the last game of call
bingo operated or conducted by the licensee for such
calendar daysession.

(x)(w) No
licensee shall purchase disposable paper call bingo
cardsor obtain bingo faces or instant bingo tickets from any
person or entity
other than a bingo card distributor registered
by the secretary of revenueas provided in this actpursuant to K.S.A.
79-4712a, and amendmentsthereto.

(y)(x) All
instant bingo tickets sold or distributed to licensees shall
bear on the face thereof a unique serial number which shall not be
re-
peated on the same manufacturer's form number less than every
three
years. All instant bingo tickets shall be sold or distributed in
boxes, and.
Each box shall be sealed by the manufacturer with a seal which
includes
a warning to the purchaser that the box may have been tampered with
if
the box was received by the purchaser with the seal broken. Each
box of
instant bingo tickets shall contain tickets printed in such a
manner as to
insure that at least 60% of the gross revenues generated by the
ultimate
sale of all tickets from such box shall be returned to the final
purchasers
of such tickets. No box of instant bingo tickets may be opened by a
li-
censee unless all tickets contained in a previously opened box with
the
same form number have been sold.

(z)(y) Each box
of instant bingo tickets sold or distributed to licens-
ees shall be accompanied by a flare which contains the following
infor-
mation: (1) The name of the game; (2) the manufacturer's name or
logo;
(3) the game form number; (4) the ticket count in the game; (5) the
prize
structure for the game, which includes the number of winning
tickets by
denomination and their respective winning symbol or number
combina-
tions; (6) the cost per ticket; (7) the game serial number; (8) the
winning
numbers or symbols for the top three winning tiers set out in such
a
manner that each prize may be marked off as the prize is won
and
awarded; (9) the business name of the bingo card
distributor; and (10) ifsold or distributed to a licensee under the bingo act, the
Kansas bingo
license number of the licensee to which the game is sold.

(z) (1) No progressive game may
exceed 20 consecutive sessions con-ducted by a licensee prior to the awarding of the established
prize.

(2) No more than two progressive bingo
games may be conducted inany one session.

(3) A prize for a progressive game may
start at an amount not toexceed $250 and may be increased by no more than $100 for each
sessionduring which the progressive game is continued. The prize
awarded atthe end of any progressive game shall not exceed
$1,000.

(4) If the progressive bingo game
prize is not awarded at a bingosession, the progressive bingo game shall be continued at a
future occasionuntil such time a winner is determined. The winning prize shall
be thefull amount. If there is no winner of a progressive bingo game
at a session,a stated consolation prize in an amount not to exceed $250 may
beawarded. Any consolation prize shall be less than the value of
the pro-gressive bingo game prize amount.

(5) All progressive bingo games and
rules for such games shall bedescribed fully and posted in the house rules prior to the start
of thesession. Such games shall comply with requirements imposed under
thebingo act and any rules and regulations adopted pursuant
thereto.

(6) When a person achieves the first
preannounced winning combi-nation, the game shall be completed and the next progressive
bingo gameand winning combination shall be commenced with a new bingo card
orface and all objects or balls in the receptacle.

(7) The rules for a progressive bingo
game shall remain in effect untilthe game ends and the winner is determined.

(8) Progressive bingo games may not be
conducted in conjunctionwith a session of bingo conducted at a location other than that
specifiedin the license as authorized by subsection (c) of 79-4703, and
amendmentsthereto.

(9) A licensee shall not cease bingo
operations unless all progressivebingo games are completed and prizes are awarded, unless prior
approvalhas been received from the secretary.

(aa) Except as specifically provided
by rules and regulations adoptedpursuant to the bingo act, the distribution, sale or use of
bingo cards isprohibited from and after July 1, 2003, and thereafter, only
bingo facesshall be distributed, sold or used in call bingo games operated
and con-ducted by licensees.

(bb) Only three games of instant bingo
in which the winner or win-ners of such game is determined by matching a letter, number or
symbolunder a tab of an instant bingo ticket with the winning letter,
number orsymbol in a designated call game of bingo during the same
session shallbe played in any one session. There shall be no limit on the
number ofinstant bingo tickets which may be sold for participation in any
such gameof instant bingo.

(cc) The total number of mini games of
bingo managed, operated orconducted by a licensee during a session shall not exceed 20
games. Nomini bingo game shall be conducted by a licensee more than one
hourprior to, or after the commencement of, the first regular or
special gameof call bingo operated or conducted by the licensee for such
session.

New Sec. 8. The administrator shall
require, pursuant to rules and
regulations adopted pursuant to the bingo act, identification of
each sheet
of bingo faces in order to insure compliance with the provisions of
this
act. Each package of bingo faces sold or distributed to licensees
shall be
accompanied by a printed statement which contains the following
infor-
mation:

(a) The number of bingo faces contained
in the package;

(b) the wholesale cost of each package,
including the tax paid;

(c) identification of the
manufacturer;

(d) the business name of the
distributor;

(e) the Kansas bingo license number of
the licensee to which the
package is sold; and

(f) any other information required by the
administrator.

Sec. 9. K.S.A. 79-4707 is hereby
amended to read as follows: 79-
4707. (a) The secretary of revenueadministrator, after a hearing in ac-
cordance with the provisions of the Kansas administrative procedure
act,
may revoke or suspend any license or registration certificate
issued under
the provisions of this act for any one of the
following reasons:

(1) The licensee or registrant has
fraudulently obtained the license
or registration certificate by giving false information in the
application
therefor;

(2) the licensee or registrant has
violated any of the laws of the state
of Kansas or provisions of this act or any rules and regulations
of thesecretary of revenue for the registration, licensing,
taxing, management,adopted pursuant thereto for the registration, licensing,
taxing, manage-ment, conduct or operation of games of bingo; or

(3) the licensee or registrant has become
ineligible to obtain a license
under this act.

(b) Any action of the
secretaryadministrator pursuant to
subsection
(a) is subject to review in accordance with the act for judicial
review and
civil enforcement of agency actions. In case of the revocation of
the li-
cense of any licensee or the registration of any registrant, no new
license
or registration shall be issued to such lessor, sublessor or
organization, or
any person acting for or on its behalf, for a period of six months
thereafter.
No revocation or suspension of a license or registration
certificate shall
be for a period in excess of one year if the applicant
is otherwise is qual-
ified on the date the applicant makes a new application
therefor.

(c) The secretary of revenue, or
the secretary's designee,administra-tor is hereby authorized to enjoin any person from managing,
operating
or conducting any games of bingo, or from leasing any premises for
such
purposes, if such person does not possess a valid license or
registration
certificate issued pursuant to the provisions of the acts
contained in article47 of chapter 79 of the Kansas Statutes Annotated and
amendmentsthereto, andbingo act. The
secretary, or the secretary's designee,admin-istrator shall be entitled to have an order restraining such
person from
managing, operating or conducting any games of bingo or for any
other
purpose contrary to the provisions of the acts contained in
article 47 ofchapter 79 of the Kansas Statutes Annotated and amendments
thereto,bingo act or from leasing premises for any of such
purposes, and. No
bond shall be required for any such restraining order, nor for any
tem-
porary or permanent injunction issued in such proceedings.

Sec. 10. K.S.A. 79-4708 is hereby
amended to read as follows: 79-
4708. The administration of this act shall be vested in the
secretary ofrevenue who shall adopt and enforce rules and regulations
to regulate,license, and tax the management, operation and conduct of
games ofbingo and participants therein and to properly administer
and enforcethe provisions of this act. Also, the secretary shall adopt
rules and regu-lations relating to the leasing of premises for the
management, operationand conduct of games of bingo.

(a) The administration and enforcement
of the bingo act and any rulesand regulations adopted pursuant thereto shall be vested in the
admin-istrator.

(b) Upon recommendation of the
administrator, the secretary shalladopt all rules and regulations necessary for the administration
and en-forcement of the bingo act by the administrator.

Sec. 11. K.S.A. 79-4710 is hereby
amended to read as follows: 79-
4710. (a) All amounts received by or for the secretary of
revenueadmin-istrator from license and registration fees pursuant to this
act shall be
remitted to the state treasurer and. The
state treasurer shall deposit all
of such moneys in the state treasury and, except as
otherwise provided
by K.S.A. 79-4711, and amendments thereto,for maintenance of thebingo refund fund, shall credit the same to the
state bingo regulation
fund.

(b) All amounts received by or for the
secretary of revenueadmin-istrator from the tax levied pursuant to K.S.A.
79-4704, and amendments
thereto, shall be remitted to the state treasurer
and. The state treasurer
shall deposit all of such moneys in the state treasury.

(c) There is hereby created, in
the state treasury, the state bingo
regulation fund and the county and city bingo tax fund.
Subject to themaintenance requirements of the bingo refund fund under
K.S.A. 79-4711 and amendments thereto, 1/3 of each deposit shall be
credited to thestate general fund, 1/3 of each deposit to the state bingo
regulation fundand the remaining 1/3 of such deposit shall be credited to
the county andcity bingo tax fund. Except as provided by
K.S.A. 79-4711, and amend-ments thereto, 1/3 of each deposit remitted to the state
treasurer pursuantto subsection (b) shall be credited to the state bingo
regulation fund andthe balance shall be credited to the state general fund.MoneysExcept asprovided by subsections (d) and (e), all moneys in the state
bingo regu-
lation fund shall be expended for the administration and
enforcement of
the bingo statutes in article 47 of chapter 79 of Kansas
Statutes Annotatedact, and amendments thereto, and rules and regulations
adopted pursuant
thereto. Such expenditures shall be made upon vouchers approved by
thesecretary of revenue or a person designated by the
secretaryadministra-tor.

(c) All moneys deposited in the
county and city bingo tax fund shallbe returned to the counties and cities in which the
locations and regis-tered premises are located at a time or times fixed by the
secretary butnot less than once each year. If the locations and
registered premises arelocated within the corporate limits of a city, all taxes
collected therefromshall be remitted to the city treasurer of such city and
credited to the citygeneral fund. If the locations and registered premises are
located withinthe unincorporated area of any county, all taxes collected
therefrom shallbe remitted to the county treasurer of such county and
credited to thecounty general fund. Moneys distributed to cities and
counties under thissection shall be used to assist in the enforcement of the
bingo laws of thisstate.

(d) Except as otherwise provided by
this act, all operating expensesof the administrator related to the administration and
enforcement of thebingo act appropriated by the legislature shall be paid from the
state bingoregulation fund. At the end of each fiscal year, the director of
accountsand reports shall transfer to the state general fund any moneys
in the statebingo regulation fund on each such date in excess of the amount
requiredto pay all operating expenses of the administrator related to
the admin-istration and enforcement of the bingo act.

(e) On July 1 of each year or as soon
thereafter as sufficient moneysare available, $20,000 credited to the state bingo regulation
fund shall betransferred and credited to the problem gambling grant fund
establishedby section 20, and amendments thereto.

(f) Upon the effective date of this
act, the director of accounts andreports shall transfer all moneys in the county and city bingo
tax fund tothe state bingo regulation fund. Upon the effective date of this
act, allliabilities of the county and city bingo tax fund existing prior
to the effec-tive date are hereby imposed on the state bingo regulation fund.
Thecounty and city bingo tax fund is hereby abolished.

Sec. 12. K.S.A. 79-4711 is hereby
amended to read as follows: 79-
4711. There is hereby created the bingo refund fund in the state
treasury.
The bingo refund fund shall be a refund clearing fund and refunds
of the
fees imposed under K.S.A. 79-4703, and amendments
thereto, and of the
tax levied under K.S.A. 79-4704, and amendments
thereto, shall be made
from thissuch fund. The bingo refund fund
shall be maintained by thesecretary of revenueadministrator from the
license and registration fees
received under this act and from the tax collected under
K.S.A. 79-4704and amendments theretoand taxes collected
under the bingo act in an
amount sufficient for such refunds not to exceed $10,000.

Sec. 13. K.S.A. 79-4712a is hereby
amended to read as follows: 79-
4712a. (a) No person or entity shall sell or
otherwise distribute any dis-posable paper callbingo faces, bingo cards
or instant bingo tickets to anyorganization licensed under the provisions of this
actlicensee unless anduntil such person or entity has made
application for and has been issued
a bingo card distributor registration certificate
by the secretary of revenueadministrator. Application for registration shall be
submitted to the ad-ministrator and shall be accompanied by a fee in the
amount of $500 and
shall be made upon forms prescribed by the
secretaryadministrator.

(b) Each bingo card
distributor registration certificate shall expire at
midnight on June 30 following its date of issuance. Application for
renewal
of a registration certificate shall be submitted to the
administrator andshall be accompanied by a fee in the amount
of $500 and shall be made
upon forms prescribed by the secretaryadministrator.

(c) The secretary of
revenueadministrator shall establish by
rule andregulation, by rules and regulations adopted
under the bingo act, reason-
able criteria for approval of bingo card
distributorsapplications for reg-istration. The secretary of revenueadministrator shall refuse to register
a bingo card distributor if any owner, manager or
employee thereof has,
within five years prior to registration, has been convicted
of or pleaded
guilty or nolo contendere to any felony or illegal gambling
violation in
this or any other jurisdiction.

(d) All bingo card
distributors shall maintain for a period of not less
than three years full and complete records of all
disposable paper call
bingo cards, bingo faces and instant bingo tickets sold
to licensees withinthis stateor distributed to licensees.
Such records shall be made available
for inspection by any authorized representative of the
secretary of reve-nueadministrator.

Sec. 14. K.S.A. 79-4713 is hereby
amended to read as follows: 79-
4713. (a) In addition to or in lieu of any other civil or criminal
penalty
provided by law, the secretary of revenue or the
secretary's designeeadministrator, upon a finding that a licensee under
K.S.A. 79-4703 andamendments thereto, a, lessor or a
bingo card distributor has violated any
provision of K.S.A. 79-4701 through 79-4705, 79-4705a,
79-4706, 79-4707, 79-4708, 79-4710, 79-4711 or 79-4712the
bingo act, and amend-ments thereto, or any provision of any rule and
regulation of the secretaryof revenue adopted pursuant thereto, shall impose
on such licensee, lessor
or bingo card distributor a civil fine not
exceeding $500 for each violation.

(b) No fine shall be imposed pursuant to
this section except upon the
written order of the secretary of revenue or the
secretary's designeead-ministrator to the licensee, lessor or bingo
card distributor who commit-
ted the violation. Such order shall state the violation, the fine
to be im-
posed and the right of the licensee, lessor or bingo
card distributor to
appeal the order. Such order shall be subject to appeal and review
in the
manner provided by the Kansas administrative
proceduresprocedure act.

(c) Any fine collected pursuant to this
section shall be paid to the
state treasurer, who shall deposit the entire amount in the state
treasury
and credit it to the state bingo regulation fund.

New Sec. 15. (a) The secretary of
revenue shall designate an admin-
istrator of charitable gaming. Any person designated the
administrator of
charitable gaming shall have at least five years' experience in the
area of
charitable gaming regulation. The administrator of charitable
gaming shall
be in the unclassified service and shall receive an annual salary
fixed by
the secretary of revenue and approved by the governor.

(b) Under the supervision of the
secretary, the administrator of char-
itable gaming shall administer and enforce the provisions of the
bingo act
and any rules and regulations adopted pursuant thereto. The
administra-
tor's exclusive duties shall be the administration and enforcement
of the
bingo act and any rules and regulations adopted pursuant thereto.
The
administrator shall be solely accountable to and report to the
secretary of
revenue.

New Sec. 16. The department of
revenue shall be subject to a per-
formance audit of the first year of implementation and enforcement
of
this act by the department. The scope of such audit shall be
determined
by the legislative post audit committee and shall include, but not
be lim-
ited to, the efficiency and effectiveness of the department in
implement-
ing and enforcing this act. The post auditor may contract for the
conduct
of such performance audit in accordance with procedures established
by
the legislative post audit act. The report of the audit required by
this
section shall be submitted to the legislative post audit committee
and to
the legislature no later than the first day of the 2002 session.
The fur-
nishing of audit services pursuant to this section shall be a
transaction
between the post auditor and the department of revenue and shall
be
settled in accordance with the provisions of K.S.A. 75-5515 and
amend-
ments thereto.

New Sec. 17. If any provision of
the bingo act or the application
thereof to any person or circumstances is held unconstitutional or
oth-
erwise invalid, such unconstitutionality or invalidity shall not
affect other
provisions or applications of the act which can be given effect
without
the unconstitutional or invalid provision or application, and, to
this end,
the provisions of this act are severable.

Sec. 18. K.S.A. 74-8711 is hereby
amended to read as follows: 74-
8711. (a) There is hereby established in the state treasury the
lottery
operating fund.

(b) The executive director shall remit at
least weekly to the state
treasurer all moneys collected from the sale of lottery tickets and
shares
and any other moneys received by or on behalf of the Kansas
lottery.
Upon receipt of any such remittance, the state treasurer shall
deposit the
entire amount thereof in the state treasury and credit it to the
lottery
operating fund. Moneys credited to the fund shall be expended or
trans-
ferred only as provided by this act. Expenditures from such fund
shall be
made in accordance with appropriations acts upon warrants of the
direc-
tor of accounts and reports issued pursuant to vouchers approved by
the
executive director or by a person designated by the executive
director.

(c) Moneys in the lottery operating fund
shall be used for:

(1) The payment of expenses of the
lottery, which shall include all
costs incurred in the operation and administration of the Kansas
lottery;
all costs resulting from contracts entered into for the purchase or
lease
of goods and services needed for operation of the lottery,
including but
not limited to supplies, materials, tickets, independent studies
and sur-
veys, data transmission, advertising, printing, promotion,
incentives, pub-
lic relations, communications, and distribution of
tickets and shares; and
reimbursement of costs of facilities and services provided by other
state
agencies;

(4) transfers to the state general fund
pursuant to K.S.A. 74-8713,
and amendments thereto;

(5) transfers to the state gaming
revenues fund pursuant to subsection
(d) of this section and as otherwise provided by law; and

(6) the transfers to the
county reappraisal fund as prescribed by law.

(d) The director of accounts and reports
shall transfer moneys in the
lottery operating fund to the state gaming revenues fund created
by
K.S.A. 79-4801, and amendments thereto, on or before the
15th day of
each month, for fiscal years commencing on or after July 1,
1988 in an
amount certified monthly by the executive director and determined
as
follows, whichever is greater:

(1) In An amount equal
to the moneys in the lottery operating fund
in excess of those needed for the purposes described in subsections
(c)(1)
through (c)(4); or

(2) except for pull-tab lottery
tickets and shares, an amount equal to
not less than 30% of total monthly revenues from the sales of
lottery
tickets and shares less estimated returned tickets. In the case
of pull-tablottery tickets and shares, an amount equal to not less than 20%
of thetotal monthly revenues from the sales of pull-tab lottery
tickets and sharesless estimated returned tickets.

Sec. 19. K.S.A. 74-8712 is hereby
amended to read as follows: 74-
8712. (a) There is hereby established in the state treasury the
lottery prize
payment fund.

(b) The executive director shall certify
periodically to the director of
accounts and reports such amounts as the executive director
determines
necessary to pay prizes to the holders of valid winning lottery
tickets or
shares or for the purchase of nonmonetary prizes. Upon
receipt of such
certification, the director of accounts and reports shall
promptly transfer
the amount certified from the lottery operating fund to the lottery
prize
payment fund. Moneys credited to the fund shall be expended only
forthe:

(1) The payment of prizes to the
holders of valid winning lottery tick-
ets or shares, for;

(2) the reimbursement of retailers
who have paid holders of winning
tickets or shares or;

(3) the purchase of nonmonetary
prizes; or

(4)aspurposes otherwise specifically authorized by
law.

(c) Prior to making any
expenditure for reimbursement of a retailer
or payment of a prize of $50 or more, the executive director shall
cause
all proposed prize payments to be matched against the state debtor
files
maintained by the director of accounts and reports and shall
certify and
pay or deliver any matched prize or the cash amount thereof to the
di-
rector of accounts and reports for setoff as prescribed under
K.S.A. 75-
6201 et seq., and amendments thereto.

(d) Expenditures from
suchthe lottery prize payment fund shall
be
made in accordance with appropriations acts upon warrants of the
direc-
tor of accounts and reports, or a person designated by the director
of
accounts and reports pursuant to K.S.A. 75-3732, and
amendments
thereto, issued pursuant to vouchers approved by the executive
director,
or a person designated by the executive director.

New Sec. 20. (a) There is hereby
established in the state treasury the
problem gambling grant fund. All moneys credited to such fund shall
be
used only for the awarding of grants under this section. Such fund
shall
be administered in accordance with this section and the provisions
of
appropriation acts.

(b) All expenditures from the problem
gambling grant fund shall be
made in accordance with appropriation acts upon warrants of the
director
of accounts and reports issued pursuant to vouchers approved in the
man-
ner prescribed by law.

(c) There is hereby established a state
grant program to provide as-
sistance for the direct treatment of persons diagnosed as suffering
from
pathological gambling and to provide funding for research regarding
the
impact of gambling on residents of Kansas. Research grants awarded
un-
der this section may include, but need not be limited to, grants
for de-
termining the effectiveness of education and prevention efforts on
the
prevalence of pathological gambling in Kansas. All grants shall be
made
after open solicitation of proposals and evaluation of proposals
against
criteria established in rules and regulations adopted by the
secretary of
the department of social and rehabilitation services. Both public
and pri-
vate entities shall be eligible to apply for and receive grants
under the
provisions of this section.

(d) The secretary of the department of
social and rehabilitation serv-
ices is hereby authorized to receive moneys from any grants, gifts,
con-
tributions or bequests made for the purpose of funding grants under
this
section and to expend such moneys for the purpose for which
received.

(e) All grants made in accordance with
this section shall be made from
the problem gambling grant fund. The secretary shall administer the
pro-
visions of this section and shall adopt rules and regulations
establishing
criteria for qualification to receive grants and such other matters
deemed
necessary by the secretary for the administration of this section.
Such
rules and regulations shall include, but need not be limited to, a
require-
ment that each recipient of a grant to provide treatment for
pathological
gamblers report at least annually to the secretary the grantee's
measurable
achievement of specific outcome goals.

(f) For the purpose of this section
"pathological gambling" means the
disorder by that name described in the most recent edition of the
diag-
nostic and statistical manual.

Sec. 21. K.S.A. 1999 Supp. 74-8836
is hereby amended to read as
follows: 74-8836. (a) Any organization licensee that conducts at
least 150
days of live racing during a calendar year or a fair association
that conducts
fewer than 22 days of live racing during a calendar year may apply
to the
commission for a simulcasting license to display simulcast horse or
grey-
hound races and to conduct intertrack parimutuel wagering thereon.
If
the organization licensee conducts races at a racetrack facility
that is
owned by a facility owner licensee, both licensees shall join in
the appli-
cation. A simulcasting license granted to a fair association that
conducts
fewer than 22 days of live racing shall restrict the fair
association's display
of simulcast races to a number of days, including days on which it
con-
ducts live races, equal to not more than twice the number of days
on
which it conducts live races.

(b) (1) A simulcasting license
granted to an organization licensee
other than a fair association shall authorize the display of
simulcast races
at the racetrack facility where the live races are conducted so
long as the
licensee conducts at least eight live races per day and an average
of 10
live races per day per week. If a simulcasting licensee conducts
live horse
races on a day when simulcast races are displayed by the licensee
and the
licensee conducts fewer than an average of 10 live horse races per
day
per week, not less than 80% of the races on which wagers are taken
by
the licensee during such week shall be live races conducted by the
li-
censee unless approved by the recognized horsemen's group or upon
a
finding by the commission that the organization licensee was unable
to
do so for reasonable cause. If a simulcast licensee conducts live
greyhound
races on a day when simulcast races are displayed by the licensee
and the
licensee schedules fewer than 13 live greyhound races during a
perform-
ance on such day, not less than 80% of the races on which wagers
are
taken by the licensee during such performance shall be live races
con-
ducted by the licensee.

(2) A simulcasting license granted to a
fair association shall authorize
the display of simulcast races at the racetrack facility where the
races are
conducted only if live races are scheduled for two or more days of
the
same calendar week, except that the licensee may conduct simulcast
races
in the week immediately before and immediately after a live meeting
if
the total number of days on which simulcast races are displayed
does not
exceed the total authorized in subsection (a). In no case shall the
live
meet or simulcast races allowed under this subsection exceed 10
consec-
utive weeks. For purposes of this subsection, a calendar week shall
be
measured from Monday through the following Sunday.

(3) Notwithstanding the provisions of
subsection (a), (b)(1) or (b)(2),
a fair association may apply to the commission for not more than
five
additional days of simulcasting of special events. In addition, the
com-
mission may authorize a fair association to display additional
simulcast
races but, if such fair association is less than 100 miles from an
organi-
zation licensee that is not a fair association, it
must also shall secure writ-
ten consent from that organization licensee.

(4) Notwithstanding the provisions of
subsection (b)(1), if an emer-
gency causes the cancellation of all or any live races scheduled
for a day
or performance by a simulcasting licensee, the commission or the
com-
mission's designee may authorize the licensee to display any
simulcast
races previously scheduled for such day or performance.

(5) Notwithstanding the provisions of
subsection (b)(1), the commis-
sion may authorize the licensee to display simulcast special racing
events
as designated by the commission.

(c) The application for a simulcasting
license shall be filed with the
commission at a time and place prescribed by rules and regulations
of
the commission. The application shall be in a form and include
such
information as the commission prescribes.

(2) submit with the application a written
approval of the proposed
simulcasting schedule signed by: (A) The recognized horsemen's
group
for the track, if the applicant is licensed to conduct only horse
races; (B)
the recognized greyhound owners' group, if the applicant is
licensed to
conduct only greyhound races and only greyhound races are to be
si-
mulcast; (C) both the recognized greyhound owners' group and a
rec-
ognized horsemen's group, if the applicant is licensed to conduct
only
greyhound races and horse races are to be simulcast; (D) the
recognized
greyhound owners' group, if the applicant is licensed to conduct
both
greyhound and horse races, only greyhound races are to be simulcast
and
races are to be simulcast only while the applicant is conducting
live grey-
hound races; (E) the recognized horsemen's group for the track, if
the
applicant is licensed to conduct both greyhound and horse races,
only
horse races are to be simulcast and races are to be simulcast only
while
the applicant is conducting live horse races; or (F) both the
recognized
greyhound owners' group and the recognized horsemen's group for
the
track, if the applicant is licensed to conduct both greyhound races
and
horse races and horse races are to be simulcast while the applicant
is
conducting live greyhound races or greyhound races are to be
simulcast
while the applicant is conducting live horse races; and

(3) submit, in accordance with rules and
regulations of the commis-
sion and before the simulcasting of a race, a written copy of each
contract
or agreement which the applicant proposes to enter into with regard
to
such race, and any proposed modification of any such contract or
agree-
ment.

(e) The term of a simulcasting license
shall be one year.

(f) A simulcasting licensee may apply to
the commission or its des-
ignee for changes in the licensee's approved simulcasting schedule
if such
changes are approved by the respective recognized greyhound
owners'
group or recognized horsemen's group needed throughout the term
of
the license. Application shall be made upon forms furnished by the
com-
mission and shall contain such information as the commission
prescribes.

(g) Except as provided by subsection (j),
the takeout for simulcast
horse and greyhound races shall be the same as it is for the live
horse
and greyhound races conducted during the current or next live race
meet-
ing at the racetrack facility where the simulcast races are
displayed. For
simulcast races the tax imposed on amounts wagered shall be as
provided
by K.S.A. 74-8823, and amendments thereto. Of the balance of
the tak-
eout remaining after deduction of taxes, an amount equal to a
percentage,
to be determined by the commission, of the gross sum wagered on
si-
mulcast races shall be used for purses, as follows:

(1) For greyhound races conducted by the
licensee, if the simulcast
race is a greyhound race and the licensee conducts only live
greyhound
races;

(2) for horse races conducted by the
licensee, if the simulcast race is
a horse race and the licensee conducts only live horse races;

(3) for horse races and greyhound races,
as determined by both the
recognized horsemen's group and the recognized greyhound
owners'
group, if the simulcast race is a greyhound race and the licensee
does not
conduct or is not currently conducting live greyhound races; or

(4) for horse races and greyhound races,
as determined by both the
recognized horsemen's group and the recognized greyhound
owners'
group, if the simulcast is a horse race and the licensee does not
conduct
or is not currently conducting live horse races. That portion of
simulcast
purse money determined to be used for horse purses shall be
apportioned
by the commission to the various horse race meetings held in any
calendar
year based upon the number of live horse race dates comprising
such
horse race meetings in the preceding calendar year.

(h) Except as provided by subsection
(j):

(1) If a simulcasting licensee has a
license to conduct live horse races
and the licensee displays a simulcast horse race: (A) All breakage
proceeds
shall be remitted by the licensee to the commission not later than
the
15th day of the month following the race from which the breakage
is
derived and the commission shall promptly remit any such proceeds
re-
ceived to the state treasurer, who shall deposit the entire amount
in the
state treasury and credit it to the Kansas horse breeding
development
fund created by K.S.A. 74-8829, and amendments thereto; and
(B) all
unclaimed ticket proceeds shall be remitted by the licensee to the
com-
mission on the 61st day after the end of the calendar year and the
com-
mission shall promptly remit any such proceeds received to the
state
treasurer, who shall deposit the entire amount in the state
treasury and
credit it to the Kansas horse breeding development fund created
by
K.S.A. 74-8829, and amendments thereto.

(2) If a simulcasting licensee has a
license to conduct live greyhound
races and the licensee displays a simulcast greyhound race,
breakage and
unclaimed winning ticket proceeds shall be distributed in the
manner
provided by K.S.A. 74-8821 and 74-8822, and amendments thereto,
for
breakage and unclaimed winning ticket proceeds from live
greyhound
races.

(3) If a simulcasting licensee has a
license to conduct live racing of
only horses and the licensee displays a simulcast greyhound race,
un-
claimed winning ticket proceeds shall be distributed in the manner
pro-
vided by K.S.A. 74-8822, and amendments thereto, for unclaimed
win-
ning ticket proceeds from live greyhound races. Breakage for such
races
shall be distributed for use to benefit greyhound racing as
determined by
the commission.

(4) If a simulcasting licensee has a
license to conduct live racing of
only greyhounds and the licensee displays a simulcast horse race:
(A) All
breakage proceeds shall be remitted by the licensee to the
commission
not later than the 15th day of the month following the race from
which
the breakage is derived and the commission shall promptly remit any
such
proceeds received to the state treasurer, who shall deposit the
entire
amount in the state treasury and credit it to the Kansas horse
breeding
development fund created by K.S.A. 74-8829, and amendments
thereto;
and (B) all unclaimed ticket proceeds shall be remitted by the
licensee
to the commission on the 61st day after the end of the calendar
year and
the commission shall promptly remit any such proceeds received to
the
state treasurer, who shall deposit the entire amount in the state
treasury
and credit it to the Kansas horse breeding development fund created
by
K.S.A. 74-8829, and amendments thereto.

(i) The commission may approve a request
by two or more simul-
casting licensees to combine wagering pools within the state of
Kansas
pursuant to rules and regulations adopted by the commission.

(j) (1) The commission may
authorize any simulcasting licensee to
participate in an interstate combined wagering pool with one or
more
other racing jurisdictions.

(2) If a licensee participates in an
interstate pool, the licensee may
adopt the takeout of the host jurisdiction or facility,
except that the tak-eout shall not be more than 20% on win, place and show bets
and notmore than 25% on all other bets. The amount and
manner of paying
purses from the takeout in an interstate pool shall be as provided
by
subsection (g).

(3) The tax imposed on amounts wagered in
an interstate pool shall
be as provided by K.S.A. 74-8823, and amendments thereto.
Parimutuel
taxes may not be imposed on any amounts wagered in an interstate
com-
bined wagering pool other than amounts wagered within this
jurisdiction.

(4) Breakage for interstate combined
wagering pools shall be calcu-
lated in accordance with the statutes and rules and regulations of
the host
jurisdiction and shall be allocated among the participating
jurisdictions in
a manner agreed to among the jurisdictions. Breakage allocated to
this
jurisdiction shall be distributed as provided by subsection
(h).

(5) Upon approval of the respective
recognized greyhound owners'
group or recognized horsemen's group, the commission may permit
an
organization licensee to simulcast to other racetrack facilities or
off-track
wagering or intertrack wagering facilities in other jurisdictions
one or
more races conducted by such licensee, use one or more races
conducted
by such licensee for an intrastate combined wagering pool or use
one or
more races conducted by such licensee for an interstate combined
wa-
gering pool at off-track wagering or intertrack wagering locations
outside
the commission's jurisdiction and may allow parimutuel pools in
other
jurisdictions to be combined with parimutuel pools in the
commission's
jurisdiction for the purpose of establishing an interstate combined
wa-
gering pool.

(6) The participation by a simulcasting
licensee in a combined inter-
state wagering pool does not cause that licensee to be considered
to be
doing business in any jurisdiction other than the jurisdiction in
which the
licensee is physically located.

(k) If the organization licensee,
facility owner licensee if any and the
recognized horsemen's group or recognized greyhound owners' group
are
unable to agree concerning a simulcasting application, the matter
may be
submitted to the commission for determination at the written
request of
any party in accordance with rules and regulations of the
commission.

(l) This section shall be part of and
supplemental to the Kansas par-
imutuel racing act.

New Sec. 22. On July 1 of each year
or as soon thereafter as sufficient
moneys are available, $80,000 credited to the state gaming revenues
fund
shall be transferred and credited to the problem gambling grant
fund
established by section 20, and amendments thereto.

(1) An amount equal to 10% of the
balance of all moneys credited to
the state gaming revenues fund shall be transferred and credited to
the
correctional institutions building fund created pursuant to K.S.A.
76-6b09
and amendments thereto, to be appropriated by the legislature for
the
use and benefit of state correctional institutions as provided in
K.S.A. 76-
6b09 and amendments thereto; and

(2) an amount equal to 5% of the
balance of all moneys credited to
the state gaming revenues fund shall be transferred and credited to
the
juvenile detention facilities fund.

(b) There is hereby created in the state
treasury the juvenile deten-
tion facilities fund which shall be administered by the
commissioner of
juvenile justice. The Kansas advisory group on juvenile justice and
delin-
quency prevention shall review and make recommendations
concerning
the administration of the fund. All expenditures from the juvenile
deten-
tion facilities fund shall be for the retirement of debt of
facilities for the
detention of juveniles; or for the construction, renovation,
remodeling or
operational costs of facilities for the detention of juveniles in
accordance
with a grant program which shall be established with grant criteria
de-
signed to facilitate the expeditious award and payment of grants
for the
purposes for which the moneys are intended. "Operational costs"
shall
not be limited to any per capita reimbursement by the commissioner
of
juvenile justice for juveniles under the supervision and custody of
the
commissioner but shall include payments to counties as and for
their costs
of operating the facility. The commissioner of juvenile justice
shall make
grants of the moneys credited to the juvenile detention facilities
fund for
such purposes to counties in accordance with such grant program.
All
expenditures from the juvenile detention facilities fund shall be
made in
accordance with appropriation acts upon warrants of the director of
ac-
counts and reports issued pursuant to vouchers approved by the
com-
missioner of juvenile justice or the commissioner's designee.

Sec. 24. K.S.A. 79-4804 is hereby
amended to read as follows: 79-
4804. (a) After the transfer of moneys pursuant to section 22,
and amend-ments thereto, an amount equal to 85% of the balance
of all moneys
credited to the state gaming revenues fund shall be transferred and
cred-
ited to the state economic development initiatives fund.
Expenditures
from the state economic development initiatives fund shall be made
in
accordance with appropriations acts for the financing of such
programs
supporting and enhancing the existing economic foundation of the
state
and fostering growth through the expansion of current, and the
establish-
ment and attraction of new, commercial and industrial enterprises
as pro-
vided by this section and as may be authorized by law and not less
than
1/2 of such money shall be distributed equally among the
congressional
districts of the state. Except as provided by subsection (g), all
moneys
credited to the state economic development initiatives fund shall
be cred-
ited within the fund, as provided by law, to an account or accounts
of the
fund which are created by this section.

(b) There is hereby created the Kansas
capital formation account in
the state economic development initiatives fund. All moneys
credited to
the Kansas capital formation account shall be used to provide,
encourage
and implement capital development and formation in Kansas.

(c) There is hereby created the Kansas
economic development re-
search and development account in the state economic development
in-
itiatives fund. All moneys credited to the Kansas economic
development
research and development account shall be used to promote,
encourage
and implement research and development programs and activities in
Kan-
sas and technical assistance funded through state educational
institutions
under the supervision and control of the state board of regents or
other
Kansas colleges and universities.

(d) There is hereby created the Kansas
economic development en-
dowment account in the state economic development initiatives fund.
All
moneys credited to the Kansas economic development endowment
ac-
count shall be accumulated and invested as provided in this section
to
provide an ongoing source of funds which shall be used for
economic
development activities in Kansas, including but not limited to
continuing
appropriations or demand transfers for programs and projects which
shall
include, but are not limited to, specific community infrastructure
projects
in Kansas that stimulate economic growth.

(e) Except as provided in subsection (f),
the director of investments
may invest and reinvest moneys credited to the state economic
develop-
ment initiatives fund in accordance with investment policies
established
by the pooled money investment board under K.S.A. 75-4232, and
amendments thereto, in the pooled money investment portfolio. All
mon-
eys received as interest earned by the investment of the moneys
credited
to the state economic development initiatives fund shall be
deposited in
the state treasury and credited to the Kansas economic development
en-
dowment account of such fund.

(f) Moneys credited to the Kansas
economic development endow-
ment account of the state economic development initiatives fund may
be
invested in government guaranteed loans and debentures as provided
by
law in addition to the investments authorized by subsection (e) or
in lieu
of such investments. All moneys received as interest earned by the
in-
vestment under this subsection of the moneys credited to the
Kansas
economic development endowment account shall be deposited in
the
state treasury and credited to the Kansas economic development
endow-
ment account of the state economic development initiatives
fund.

(g) In each fiscal year, the director of
accounts and reports shall make
transfers in equal amounts on July 15 and January 15 which in the
aggre-
gate equal $2,000,000 from the state economic development
initiatives
fund to the state water plan fund created by K.S.A. 82a-951, and
amend-
ments thereto. No other moneys credited to the state economic
devel-
opment initiatives fund shall be used for: (1) Water-related
projects or
programs, or related technical assistance; or (2) any other
projects or
programs, or related technical assistance, which meet one or more
of the
long-range goals, objectives and considerations set forth in the
state water
resource planning act.

New Sec. 25. All sales of bingo
cards, bingo faces and instant bingo
tickets by licensees under K.S.A. 79-4701 et seq., and
amendments
thereto, shall be exempt from the taxes levied and collected by
cities and
counties under K.S.A. 12-187 et seq., and amendments
thereto.

Sec. 26. K.S.A. 1999 Supp. 79-3603
is hereby amended to read as
follows: 79-3603. For the privilege of engaging in the business of
selling
tangible personal property at retail in this state or rendering or
furnishing
any of the services taxable under this act, there is hereby levied
and there
shall be collected and paid a tax at the rate of 4.9%
and,unless otherwisespecifically provided by law. Within a redevelopment
district established
pursuant to K.S.A. 74-8921, and amendments thereto, there is
hereby
levied and there shall be collected and paid an additional tax at
the rate
of 2% until the earlier of the date the bonds issued to finance or
refinance
the redevelopment project have been paid in full or the final
scheduled
maturity of the first series of bonds issued to finance any part of
the
project upon:

(a) The gross receipts received from the
sale of tangible personal
property at retail within this state;

(b) (1) the gross receipts from
intrastate telephone or telegraph serv-
ices and (2) the gross receipts received from the sale of
interstate tele-
phone or telegraph services, which (A) originate within this state
and
terminate outside the state and are billed to a customer's
telephone num-
ber or account in this state; or (B) originate outside this state
and ter-
minate within this state and are billed to a customer's telephone
number
or account in this state except that the sale of interstate
telephone or
telegraph service does not include: (A) Any interstate incoming or
out-
going wide area telephone service or wide area transmission type
service
which entitles the subscriber to make or receive an unlimited
number of
communications to or from persons having telephone service in a
speci-
fied area which is outside the state in which the station provided
this
service is located; (B) any interstate private communications
service to
the persons contracting for the receipt of that service that
entitles the
purchaser to exclusive or priority use of a communications channel
or
group of channels between exchanges; (C) any value-added
nonvoice
service in which computer processing applications are used to act
on the
form, content, code or protocol of the information to be
transmitted; (D)
any telecommunication service to a provider of telecommunication
serv-
ices which will be used to render telecommunications services,
including
carrier access services; or (E) any service or transaction defined
in this
section among entities classified as members of an affiliated group
as
provided by federal law (U.S.C. Section 1504). For the purposes of
this
subsection the term gross receipts does not include purchases of
tele-
phone, telegraph or telecommunications using a prepaid telephone
call-
ing card or pre-paid authorization number. As used in this
subsection, a
pre-paid telephone calling card or pre-paid authorization number
means
the right to exclusively make telephone calls, paid for in advance,
with
the prepaid value measured in minutes or other time units, that
enables
the origination of calls using an access number or authorization
code or
both, whether manually or electronically dialed;

(c) the gross receipts from the sale or
furnishing of gas, water, elec-
tricity and heat, which sale is not otherwise exempt from taxation
under
the provisions of this act, and whether furnished by municipally or
pri-
vately owned utilities;

(d) the gross receipts from the sale of
meals or drinks furnished at
any private club, drinking establishment, catered event,
restaurant, eating
house, dining car, hotel, drugstore or other place where meals or
drinks
are regularly sold to the public;

(e) the gross receipts from the sale of
admissions to any place pro-
viding amusement, entertainment or recreation services including
admis-
sions to state, county, district and local fairs, but such tax
shall not be
levied and collected upon the gross receipts received from sales of
ad-
missions to any cultural and historical event which occurs
triennially;

(f) the gross receipts from the operation
of any coin-operated device
dispensing or providing tangible personal property, amusement or
other
services except laundry services, whether automatic or manually
operated;

(g) the gross receipts from the service
of renting of rooms by hotels,
as defined by K.S.A. 36-501 and amendments thereto, or by
accommo-
dation brokers, as defined by K.S.A. 12-1692, and amendments
thereto;

(h) the gross receipts from the service
of renting or leasing of tangible
personal property except such tax shall not apply to the renting or
leasing
of machinery, equipment or other personal property owned by a city
and
purchased from the proceeds of industrial revenue bonds issued
prior to
July 1, 1973, in accordance with the provisions of K.S.A. 12-1740
through
12-1749, and amendments thereto, and any city or lessee renting or
leas-
ing such machinery, equipment or other personal property
purchased
with the proceeds of such bonds who shall have paid a tax under
the
provisions of this section upon sales made prior to July 1, 1973,
shall be
entitled to a refund from the sales tax refund fund of all taxes
paid
thereon;

(j) the gross receipts from the rendering
of the services of washing
and washing and waxing of vehicles;

(k) the gross receipts from cable,
community antennae and other sub-
scriber radio and television services;

(l) the gross receipts received from the
sales of tangible personal
property to all contractors, subcontractors or repairmen of
materials and
supplies for use by them in erecting structures for others, or
building on,
or otherwise improving, altering, or repairing real or personal
property
of others;

(m) the gross receipts received from fees
and charges by public and
private clubs, drinking establishments, organizations and
businesses for
participation in sports, games and other recreational activities,
but such
tax shall not be levied and collected upon the gross receipts
received from:
(1) Fees and charges by any political subdivision, by any
organization
exempt from property taxation pursuant to paragraph Ninth of
K.S.A. 79-
201, and amendments thereto, or by any youth recreation
organization
exclusively providing services to persons 18 years of age or
younger which
is exempt from federal income taxation pursuant to section
501(c)(3) of
the federal internal revenue code of 1986, for participation in
sports,
games and other recreational activities; and (2) entry fees and
charges for
participation in a special event or tournament sanctioned by a
national
sporting association to which spectators are charged an admission
which
is taxable pursuant to subsection (e);

(n) the gross receipts received from dues
charged by public and pri-
vate clubs, drinking establishments, organizations and businesses,
pay-
ment of which entitles a member to the use of facilities for
recreation or
entertainment, but such tax shall not be levied and collected upon
the
gross receipts received from: (1) Dues charged by any organization
ex-
empt from property taxation pursuant to paragraphs Eighth
and Ninth of
K.S.A. 79-201, and amendments thereto; and (2) sales of
memberships
in a nonprofit organization which is exempt from federal income
taxation
pursuant to section 501 (c)(3) of the federal internal revenue code
of
1986, and whose purpose is to support the operation of a nonprofit
zoo;

(o) the gross receipts received from the
isolated or occasional sale of
motor vehicles or trailers but not including: (1) The transfer of
motor
vehicles or trailers by a person to a corporation solely in
exchange for
stock securities in such corporation; or (2) the transfer of motor
vehicles
or trailers by one corporation to another when all of the assets of
such
corporation are transferred to such other corporation; or (3) the
sale of
motor vehicles or trailers which are subject to taxation pursuant
to the
provisions of K.S.A. 79-5101 et seq., and amendments thereto, by
an
immediate family member to another immediate family member. For
the
purposes of clause (3), immediate family member means lineal
ascendants
or descendants, and their spouses. In determining the base for
computing
the tax on such isolated or occasional sale, the fair market value
of any
motor vehicle or trailer traded in by the purchaser to the seller
may be
deducted from the selling price;

(p) the gross receipts received for the
service of installing or applying
tangible personal property which when installed or applied is not
being
held for sale in the regular course of business, and whether or not
such
tangible personal property when installed or applied remains
tangible
personal property or becomes a part of real estate, except that no
tax shall
be imposed upon the service of installing or applying tangible
personal
property in connection with the original construction of a building
or
facility, the original construction, reconstruction, restoration,
remodeling,
renovation, repair or replacement of a residence or the
construction, re-
construction, restoration, replacement or repair of a bridge or
highway.

For the purposes of this subsection:

(1) "Original construction" shall mean
the first or initial construction
of a new building or facility. The term "original construction"
shall include
the addition of an entire room or floor to any existing building or
facility,
the completion of any unfinished portion of any existing building
or fa-
cility and the restoration, reconstruction or replacement of a
building or
facility damaged or destroyed by fire, flood, tornado, lightning,
explosion
or earthquake, but such term, except with regard to a residence,
shall not
include replacement, remodeling, restoration, renovation or
reconstruc-
tion under any other circumstances;

(2) "building" shall mean only those
enclosures within which individ-
uals customarily are employed, or which are customarily used to
house
machinery, equipment or other property, and including the land
improve-
ments immediately surrounding such building;

(3) "facility" shall mean a mill, plant,
refinery, oil or gas well, water
well, feedlot or any conveyance, transmission or distribution line
of any
cooperative, nonprofit, membership corporation organized under or
sub-
ject to the provisions of K.S.A. 17-4601 et seq., and amendments
thereto,
or of any municipal or quasi-municipal corporation, including the
land
improvements immediately surrounding such facility; and

(4) "residence" shall mean only those
enclosures within which indi-
viduals customarily live;

(q) the gross receipts received for the
service of repairing, servicing,
altering or maintaining tangible personal property, except computer
soft-
ware described in subsection (s), which when such services are
rendered
is not being held for sale in the regular course of business, and
whether
or not any tangible personal property is transferred in connection
there-
with. The tax imposed by this subsection shall be applicable to the
services
of repairing, servicing, altering or maintaining an item of
tangible personal
property which has been and is fastened to, connected with or built
into
real property;

(r) the gross receipts from fees or
charges made under service or
maintenance agreement contracts for services, charges for the
providing
of which are taxable under the provisions of subsection (p) or
(q);

(s) the gross receipts received from the
sale of computer software,
and the sale of the services of modifying, altering, updating or
maintaining
computer software. As used in this subsection, "computer
software"
means information and directions loaded into a computer which
dictate
different functions to be performed by the computer. Computer
software
includes any canned or prewritten program which is held or existing
for
general or repeated sale, even if the program was originally
developed
for a single end user as custom computer software. The sale of
computer
software or services does not include: (1) The initial sale of any
custom
computer program which is originally developed for the exclusive
use of
a single end user; or (2) those services rendered in the
modification of
computer software when the modification is developed exclusively
for a
single end user only to the extent of the modification and only to
the
extent that the actual amount charged for the modification is
separately
stated on invoices, statements and other billing documents provided
to
the end user. The services of modification, alteration, updating
and main-
tenance of computer software shall only include the modification,
alter-
ation, updating and maintenance of computer software taxable under
this
subsection whether or not the services are actually provided;
and

(t) the gross receipts received for
telephone answering services, in-
cluding mobile phone services, beeper services and other similar
services;and

(u) the gross receipts received from the
sale of prepaid telephone
calling cards or pre-paid authorization numbers and the recharge of
such
cards or numbers. A pre-paid telephone calling card or pre-paid
author-
ization number means the right to exclusively make telephone calls,
paid
for in advance, with the prepaid value measured in minutes or other
time
units, that enables the origination of calls using an access number
or
authorization code or both, whether manually or electronically
dialed. If
the sale or recharge of such card or number does not take place at
the
vendor's place of business, it shall be conclusively determined to
take
place at the customer's shipping address; if there is no item
shipped then
it shall be the customer's billing address.;
and

(v) the gross receipts received from
the sales of bingo cards, bingofaces and instant bingo tickets by licensees under K.S.A.
79-4701, et seq.,and amendments thereto, shall be taxed at a rate of: (1) 4.9% on
July 1,2000, and before July 1, 2001; and (2) 2.5% on July 1, 2001, and
beforeJuly 1, 2002. From and after July 1, 2002, all sales of bingo
cards, bingofaces and instant bingo tickets by licensees under K.S.A.
79-4701 et seq.,and amendments thereto, shall be exempt from taxes imposed
pursuant tothis section.